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Using step-shape relative supply curve that comes from Ricardo's model (relative prices against relative quantities) a. Use a drawing to explain the patterns of trade
Using step-shape relative supply curve that comes from Ricardo's model (relative prices against relative quantities)
a. Use a drawing to explain the patterns of trade in every part of the supply curve, i.e. Who produces what across different relative price values.
b.Draw this curve (relative price of X against relative quantities of X) and explain where it's more likely that equilibrium happens when the large country (e.g U.S vs Iceland) has the highest opportunity cost of producing one unit of X.
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